5 September 2015

Capacity Remains One of Afghanistan's Biggest Obstacles

The 6th Regional Economic Cooperation Conference on Afghanistan (RECCA VI) began Thursday in Kabul. The two-day conference is part of a series launched in 2005 in Kabul, with subsequent conferences in New Delhi (2006), Islamabad (2009), Istanbul (2010), and Dushanbe (2012). This is the first that President Ashraf Ghani will preside over.

The conference–which has been subtitled “The Silk Road Through Afghanistan”–predictably will cover issues of trade and transport, energy, resource extraction, investment, training, and disaster preparedness. The AP reported that “delegates were to discuss policy priorities, inter-regional trade, harmonization of customs and border routines, and market expansion” Ghani, who has been in office for just under a year, promised during the December 2014 London Conference on Afghanistan to make the country self-reliant–boosting the economy and tackling corruption.

According to TOLOnews, ministers from 30 countries and representatives from more than 40 international organizations are attending the conference. Ghani is scheduled to give remarks Friday morning ahead of the high-level ministerial meeting; the schedule allots him 45 minutes. But will it all just be talk? Looking at the declarations from the last conference–held in 2012 in Dushanbe–and taking into consideration the changes (or lack there of) in security, skepticism is warranted, especially when it comes to energy projects.

In the 2012 declaration the gathered ministers both endorsed and pledged their commitment to take “serious and measurable steps” toward the completion of a set of “priority projects.” The energy section features a litany projects and though progress has been made on some, others are stalled or significantly delayed. For example, the declaration’s energy section leads with a pledge to begin construction on the TAPI pipeline by 2014. Turkmenistan recently said it will begin construction on the pipeline in December 2015.

Another pledge is the “completion of the CASA-1000 project.” In December, the participating countries hailed as an “historic accord” a formalized agreement on the ambitious project to supply South Asia with electricity from Central Asia. Casey Michel at the time wrote for The Diplomat that “given the current energy situation on the ground – and for the foreseeable future – CASA-1000 currently stands as another interregional project stocked with rhetoric but short on reality.”

Recently, the Afghan president called for a “holy war” on corruption, calling it a “cancerous lesion.” Ghani, a former World Bank employee (from 1991 to 2001), borrowed terminology from former World Bank PresidentJames D. Wolfensohn, who called corruption a “cancer” in a famous 1996 speech that continues to be cited within the World Bank as a mandate to push anti-corruption initiatives in development projects.

Beyond security (though not independent of it), one thing that has held Afghanistan back is the inability of ministries to actually spend funds appropriated for development projects. According to TOLOnews Afghan senators reviewed financial reports from 2014–and found that a number of ministries hadn’t managed to utilize their budgets. The senators said that out of 717 development projects in the national budget, “spending for 347 programs were zero”:

The Ministries of Public Health, Education, Agriculture, Public Works, Water and Energy and Higher Education and also the Independent Directorate of Local Governance (IDLG) are among the government organizations that failed to use their development budgets.

“The problem is with the lack of capacity within the government organizations and the absence of transparency in the budgets,” said Mohammad Alam Izadyar, deputy chairman of Senate.

Overall, the government has been able to spend only 45 percent of development budgets for year 2014.

At RECCA VI, regional leaders may highlight big projects and grand initiatives, but one of the roadblocks to economic development remains capacity. Make no mistake, Afghanistan needs some of these grand infrastructure projects–especially when it comes to energy–but less high-profile projects like training and transparency initiatives are equally necessary.